Mathematics 380, Actuarial Models I, Fall 2003

Illinois State University Mathematics Department

Instructors

Classes Meet

Tuesdays and Thursdays 4:00-5:50 p.m. (with a ten minute break), in Stevenson Hall, room 310.

Office Hours

Tuesdays and Thursdays 3:00-3:50 p.m. Please ask for an appointment at other times.

Textbooks

Actuarial Mathematics, 2nd Edition, by Bowers et al., published in 1997 by the Society of Actuaries. The book is available at the ISU Bookstore. Only the portions of the book covered on the Society of Actuaries Course 3 examination will be covered in class (note that the Casualty Actuarial Society examination 3 material from the textbook is a subset of the material on the Society of Actuaries Course 3 examination material from the textbook). It is also recommended that you use Actex Manual for Course 3, published by Actex Publications, as a supplementary textbook. If you are planning to take Course 3 examination you are urger to obtain both textbooks.

Objective

The objective of this class is to help you learn about actuarial models of life contingencies (i.e., financial random variables dependent on human life, such as life insurance payments, life annuity payments, pension payments, etc.). We will cover topics such as: survival distributions, life tables, mathematics of life insurance, life annuities, premiums, and reserves. These actuarial models form a key part of modern actuarial science.

Grading

There will be four tests and a final examination. You can have a make-up test, but a make-up will be made intentionally at least 20% more difficult. The final will count as 40% of your grade, and the best two of the four tests will count as 30% of your grade each. The grading scale will be as follows: 80% or better — A, 70% to 80% — B, 60% to 70% — C, 50% to 60% — D, below 50% — F. You will also receive up to 20% extra credit for the better of the your two worst tests. Because tests 3 and 4 will be comprehensive, you will be able to treat either of the tests 3, 4, or 5 as a final. While the grading scale may appear liberal, it is justified by the level of difficulty of the material. Two of the tests are given before the final deadline to drop the class. If those two tests are overewhelming to you, you should reassess your situation in the class. Note also that the first test is given before the deadline to drop the class with full refund. This is a very difficult class, and you should be fully aware of this.

Schedule of classes

• Tuesday, August 19, 2003. Chapter 3 (Survival distributions and life tables).Thursday, August 21, 2003. Chapter 3 (Survival distributions and life tables). Class taught by Mr. Ken Williams.
• Tuesday, August 26, 2003. Chapter 3 (Survival distributions and life tables). Class taught by Mr. Ken Williams.
• Thursday, August 28, 2003. Chapter 3 (Survival distributions and life tables). Class taught by Mr. Ken Williams.
• Tuesday, September 2, 2003. Chapter 4 (Life insurance).
• Thursday, September 4, 2003. Chapter 4 (Life insurance).
• Tuesday, September 9, 2003. Chapter 4 (Life insurance).
• Thursday, September 11, 2003. Test No. 1, covering Chapters 3-4.
• Tuesday, September 16, 2003. Chapter 5 (Life annuities). Class taught by Mr. Ken Williams.
• Thursday, September 18, 2003. Chapter 5 (Life annuities). Class taught by Mr. Ken Williams.
• Tuesday, September 23, 2003. Chapter 5 (Life annuities). Class taught by Mr. Ken Williams.
• Thursday, September 25, 2003. Chapter 5 (Life annuities). Class taught by Mr. Ken Williams.
• Tuesday, September 30, 2003. Chapter 6 (Premiums).
• Thursday, October 2, 2003. Chapter 6 (Premiums).
• Tuesday, October 7, 2003. Chapter 6 (Premiums).
• Thursday, October 9, 2003. Test No. 2, covering Chapters 3-6.
• Tuesday, October 14, 2003. Chapters 7-8, (Reserves).
• Thursday, October 16, 2003. Chapters 7-8, (Reserves).
• Tuesday, October 21, 2003. Chapters 7-8, (Reserves).
• Thursday, October 23, 2003. Chapters 7-8, (Reserves).
• Tuesday, October 28, 2003. Chapters 7-8, (Reserves).
• Thursday, October 30, 2003. Chapter 9 (Multiple life functions). Class taught by Mr. Ken Williams.
• Tuesday, November 4, 2003. Chapter 9 (Multiple life functions). Class taught by Mr. Ken Williams.
• Thursday, November 6, 2003. Chapter 9 (Multiple life functions). Class taught by Mr. Ken Williams.
• Tuesday, November 11, 2003. Chapter 9 (Multiple life functions). Class taught by Mr. Ken Williams.
• Thursday, November 13, 2003. Chapters 10-11 (Multiple decrement models).
• Tuesday, November 18, 2003. Chapters 10-11 (Multiple decrement models).
• Thursday, November 20, 2003. Chapters 10-11 (Multiple decrement models).
• Tuesday, December 2, 2003. Test No. 3, comprehensive.
• Thursday, December 4, 2003. Test No. 4, comprehensive.
• Tuesday, December 9, 3:10 p.m., Test No. 5, comprehensive.

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